North Hollywood’s office market is on a negative absorption streak.
In the first quarter of 2016, it saw a loss of 4,730 square feet, adding to a period of negative absorption that has lasted for four of the last five quarters, according to a new report by NGKF.
The first quarter’s net occupancy loss increased the overall vacancy rate 30 basis points to 20.3 percent. Vacancy was 430 basis points higher than the 16 percent recorded in same quarter a year earlier.
However, despite the vacancy and negative absorption, office rent inched up in North Hollywood.
The average asking rent in North Hollywood’s office market closed the first quarter of 2016 at $2.69 a square foot a month, up 6 cents from the previous quarter and up 24 cents from the same quarter a year earlier.
While overall absorption has been consistently negative, there has been positive absorption at Class A properties. Over the last four quarters, net absorption for Class A buildings totaled 16,419 square feet, compared with negative 76,985 square feet for Class B and Class C buildings.
The rising demand for Class A space and an empty construction pipeline contributed to a rise in Class A asking rent, which increased 10.8 percent over the last four quarters. The average asking rent for Class B space experienced more modest growth of 5.3 percent during the same period.